What does it take to destroy a company’s brand name?
Gerald Ratner, the previous owner of Ratners, a famous British jewelry group that he turned in the 1980s in a successful chain, could offer some enlightening advice on the topic. In a speech in 1991, Ratner made negative comments about the products of the brand, calling them ‘total crap’. The value of the group rapidly plummeted by over $600 million, and the firm collapsed. Since then, the businessman has bounced back, but not without giving his name to business self-sabotage: Doing a Ratner. The scandal continues to haunt the group even after a name change. Scandals are, ultimately, the worst thing that can happen to your brand.
Your reputation is precious
Scandals are recurring matters in the business world – and while not all of them make as much noise as Gerald Ratner, maybe leave a noticeable dent in their path. Customers who distrust your company as a result of communication or security mistakes can, in the long term, affect your reputation. The ticket selling giant, Ticketmaster, knows well the price of a data breach, as after a breach affected some of its British customers, the company has suffered a backlash from the public and the EU data regulators.
Dealing with an accident
Every asset can be used to effectively build your brand, or damage it when things go wrong. A delivery truck that overturns on the road becomes synonymous in the media world of your whole company causing the accident – as opposed to one driver. Consequently, as soon as you become aware of casualties and damages that might have occurred in a truck accident, you need to make everything you can to give victims a voice. Indeed, someone who’s been injured by one of your trucks can use their story to destroy your brand. But if you work closely with the authorities and the victims’ legal advisors, you can ensure that you become the company that fixes the issues.
Dealing with failures
Mistakes happen even to the best brands. Things might have gone unnoticed, and without you knowing it, your mistake might put a part of your audience at risk. There’s no way the situation can improve by itself. You need to act to acknowledge the error and make it up to your audience. Back in 2015, Apple Music offers a one-month free trial without paying the artists for the music played during the period. Taylor Swift announced a public boycott and soon enough, Apple admit its wrongdoing publicly, mention Swift that her comments had been heard. The result? A massive reputation boost for Apple!
Don’t let rumors win
Last, but not least, rumors or fake news can create a scandal that will break your brand. Apple once registered a record loss of $9 million market value when a rumor about Steve Jobs’s heart attack was spread back in 2008. While you can disprove a rumor, you can’t stop it from impact your brand in the short term. The best strategy is to use it as part of an advertising campaign, like McDonald’s are doing.
Scandals can turn a winning company into a dead and forgotten brand. But while scandals are unavoidable, it’s the way you react to them that can make or break your business. Using scandals as a way to boost your reputation and show your responsibility as a brand is the way forward.